Track the companies that are adding Bitcoin, ETH or XRP to their balance sheets.
Research the global companies adding cryptocurrencies to their treasuries and why they’re doing it.
Traditionally companies maintain their balance sheets with cash, stocks, real estate and sometimes assets like gold. But more recently firms have started adding cryptocurrencies including Bitcoin, Ethereum and Solana to their reserves as part of their treasury strategy.
These are called cryptocurrency treasury companies and they’ve become a hot topic in the investing world, for good reason.
There are several reasons a company might invest in a cryptocurrency like Bitcoin. Some firms see the value in investing in a growth asset to combat against inflation, or to bolster their balance sheets.
Many see it as a way to publicly align with the cryptocurrency eco-system. They’re positioning themselves as future focused and crypto-integrated.
Buying shares in a crypto treasury can be an alternative to investing in the crypto itself, without needing to sign up to an exchange. For example, a firm that holds large amounts of Bitcoin will often see its share price loosely track the price of Bitcoin.
Companies that become crypto treasuries are also cementing their belief in the future of crypto and their readiness to be at the forefront of that evolving technology. This can be a major drawcard for investors that align with these views.
For active traders, it can be advantageous to track the movements of these treasuries to capitalise on price swings triggered by coin volatility, major sell or buy actions or news events.
Companies of all shapes and sizes are buying up cryptocurrencies, however the companies investors are most interested in are typically major firms trading on a stock exchange.
Publicly traded companies: Firms that trade on a stock exchange like Coinbase and Tesla are upfront about their cryptocurrency holdings. These disclosures must be included in earnings or treasury reports and signal strategic alignment with crypto.
Private companies: Startups and large private firms may also hold cryptocurrency, particularly those building DeFi or Web3 products. However, because private firms aren’t required to make their financial statements publicly available, their holdings are harder to track.
ETFs and funds: There are now more than a dozen institutional products and funds offering crypto exposure, though only a handful within Australia.
The amount of crypto held by a company is just one part of the equation. It’s also important to understand why and how it fits into their overall financial strategy.
